Court File and Parties
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Brock Fryday, Plaintiff
AND:
Pilot Insurance Company, Aviva Insurance Company of Canada, Lerners & Associates LLP, and Nigel Gilby, Defendants
BEFORE: Justice J.R. Sproat
COUNSEL: A. Murray, for the Plaintiff
D. Williams, for the Defendants Lerners & Associates LLP and Nigel Gilby (“the Lerners Defendants”)
HEARD: November 26, 2021
ENDORSEMENT
INTRODUCTION AND OVERVIEW
1The defendant Nigel Gilby (“Gilby”), a lawyer, was retained to represent the plaintiff Brock Fryday who was seriously injured in an accident on June 16, 1982 when he was 14 years old.
2Gilby advised Fryday in relation to the settlement of an accident benefits (“AB”) claim and a tort claim. The claims were both settled in or about June, 1999. Fryday, at the time 17 years old, and his Litigation Guardian and mother, signed all of the settlement documentation. The AB settlement provided a lump sum payment and a structured settlement providing monthly payments for life.
3In 2017 Fryday consulted James Leone for advice concerning the fact that OHIP was refusing to fund surgery that he wanted to have (OHIP subsequently agreed to pay for the surgery). Mr. Leone made inquiries concerning the settlement of the AB claim and advised Fryday that he had grounds for a negligence action. His law firm commenced an action on December 17, 2018 (approximately 19½ years after the settlement and 18 years after the plaintiff was no longer a minor) claiming that Gilby was negligent and the AB settlement was improvident.
4The Notice of Motion requested summary judgment on the basis that the claim was statute barred. In their factum, however, the Moving Parties made the alternative argument that summary judgment should be granted dismissing the action on the basis that the plaintiff failed to present any evidence that he has suffered damages. While Mr. Williams is correct that this argument was set out in his factum of September 2, 2021, it was not set out in the Notice of Motion or known at the time Fryday prepared and filed his evidence. As such, if it was necessary, I would have adjourned that part of the motion to allow further evidence to be filed by Fryday.
SUMMARY JUDGMENT IS APPROPRIATE
5There are no real issues of credibility. Gilby was not cross-examined on his affidavit evidence. Fryday and Leone were cross-examined but not at length. Their credibility was not challenged.
6In his factum Fryday, for the purpose of this motion only, admitted most of the facts set out in the Moving Parties’ factum.
7Both Fryday and the Moving Parties submitted that there is no genuine issue requiring a trial. I agree and find that it is appropriate to decide the limitation period issue on this motion for summary judgment.
THE EVIDENCE
8Prior to the AB settlement Fryday had received $106,343 in benefits. Pursuant to the settlement he received $100,000 in a lump sum, a structured settlement funded by $215,000 and $25,000 for costs.
9The resolution of the tort claim provided for an additional $185,000 to fund a structured settlement and $10,000 to be paid to Fryday when he turned 18.
10Gilby deposed that he discussed the proposed settlement at length with Fryday, his father, and his mother the Litigation Guardian. The agreements were subsequently approved by the court as Fryday was 17 years old at the time.
11The first complaint Gilby received from Fryday or his parents was the Statement of Claim served on May 31, 2019. By that time his files concerning the tort and AB claims had been destroyed.
12Fryday filed an affidavit which, in addition to confirming the history of the matter, included the following:
a) as a result of his injuries he requires a prosthetic leg to be able to walk;
b) in the spring and summer of 2017 OHIP denied his request to pay for a procedure called “osseointegration”. This led his parents to contact Leone for advice;
c) his parents met with Leone and then advised him that Leone wanted to discuss with him a possible claim against Gilby. Fryday met with Leone on September 15, 2017 and Leone raised concerns about the amount of the settlements. On November 2, 2017 Leone advised him he might have a viable claim.
d) the September 15 and November 2, 2017 meetings were the first time a lawyer had raised concerns about the advice received from Gilby.
13Fryday’s affidavit does not provide any information about what transpired from the settlement date in 1999 to July, 2017 when he learned that his parents had a meeting with Leone. In cross-examination Fryday indicated that until Leone was consulted, he had not thought about the settlements or whether Gilby’s advice was adequate or not. Fryday did acknowledge that his condition improved significantly between the 1997 cost of future care report and the 1999 settlement.
14Leone’s affidavit indicates that upon review of the settlement documents he was concerned about the quantum of the settlements. He was also concerned that certain documents (most importantly a cost of future care report) had not been put before the court when judicial approval of the tort and AB settlements was obtained.
15Leone’s affidavit attached the Statement of Claim which makes boiler plate allegations of all manner of negligence and claims that Fryday has suffered damages having given up access to various statutory accident benefits.
16In cross-examination Leone indicated that in his July 17, 2017 meeting with Fryday’s mother and stepfather he was advised that Fryday “was now sort of out of money for his needs” and Leone wanted to determine if an “inadequacy existed”. Leone also indicated in his meeting with Fryday on September 15, 2017 there was discussion about the fact that Fryday “didn’t have money … to get the kind of care he needed”.
Daniel Balena was retained by the Leone Murray law firm to provide an expert opinion as to whether Gilby had been negligent. I will only make brief reference to his opinion because, while it provides some context, it is not otherwise relevant to the motion for summary judgment. Balena in his opinion letter dated July 22, 2020 points out that an August 8, 1997 Future Care Cost report had been obtained and there was a significant gap between the future costs Fryday could incur and the amount provided by the AB settlement.
LAW AND ANALYSIS
17Section 5 of the Limitations Act, S.O. 2007 Sched. B provides as follows:
5 (1) A claim is discovered on the earlier of,
(a) the day on which the person with the claim first knew,
(i) that the injury, loss or damage had occurred,
(ii) that the injury, loss or damage was caused by or contributed to by an act or omission,
(iii) that the act or omission was that of the person against whom the claim is made, and
(iv) that, having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it; and
(b) the day on which a reasonable person with the abilities and in the circumstances of the person with the claim first ought to have known of the matters referred to in clause (a). 2002, c. 24, Sched. B, s. 5 (1).
(2) A person with a claim shall be presumed to have known of the matters referred to in clause (1) (a) on the day the act or omission on which the claim is based took place, unless the contrary is proved. 2002, c. 24, Sched. B, s. 5 (2).
18The presumption in s.5(2) does not apply. On the date of settlement, being the date of the act or omission relied upon, Gilby was representing Fryday and advising him it was a favourable settlement. Further, at that time Fryday had no actual experience in terms of whether his income from the structured settlement would reasonably meet his needs which, but for a settlement, would have been provided by his accident benefit insurer.
19The onus is on Fryday to prove that his claim is not statute barred. (See Soper v. Southcott 1998 5359 (ON CA), [1998] O.J. No. 2799 (C.A.) paragraph 14 and Fehr v. Sun Life Assurance of Canada, 2018 ONCA 718). On this motion for summary judgment his obligation is to put his best foot forward in terms of putting evidence before the court.
20In conducting my s.5(1)(b) analysis I am required to consider any evidence concerning Fryday’s “abilities and circumstances”. For example, if he lacked even the basic ability to compute or comprehend whether his expenses and unmet needs exceeded his income that would be a relevant circumstance. If Fryday’s parents assumed responsibility for his finances so that he did not have access to financial information that would be a relevant circumstance. If Fryday’s needs were being met up until December 17, 2016 (two years prior to commencement of the action) but then additional needs became apparent, that would be a relevant circumstance.
21There is, however, no evidence before the court as to Fryday having abilities or special circumstances that would be relevant to the s.5(1)(b) analysis.
22Fryday’s evidence is that he never turned his mind to whether he had been properly advised by Gilby from the date of the settlement in 1999 to 2017. He did not do so until he received advice from Leone in September, 2017.
23In Grant Thornton LLP v. New Brunswick 2021 SCC 31, Moldaver J. for the court stated:
44In assessing the plaintiff’s state of knowledge, both direct and circumstantial evidence can be used. Moreover, a plaintiff will have constructive knowledge when the evidence shows that the plaintiff ought to have discovered the material facts by exercising reasonable diligence. Suspicion may trigger that exercise (Crombie Property Holdings Ltd. v. McColl-Frontenac Inc., 2017 ONCA 16, 406 D.L.R. (4th) 252, at para. 42).
45Finally, the governing standard requires the plaintiff to be able to draw a plausible inference of liability on the part of the defendant from the material facts that are actually or constructively known. In this particular context, determining whether a plausible inference of liability can be drawn from the material facts that are known is the same assessment as determining whether a plaintiff “had all of the material facts necessary to determine that [it] had prima facie grounds for inferring [liability on the part of the defendant]” (Brown v. Wahl, 2015 ONCA 778, 128 O.R. (3d) 583, at para. 7; see also para. 8, quoting Lawless v. Anderson, 2011 ONCA 102, 276 O.A.C. 75, at para. 30). Although the question in both circumstances is whether the plaintiff’s knowledge of the material facts gives rise to an inference that the defendant is liable, I prefer to use the term plausible inference because in civil litigation, there does not appear to be a universal definition of what qualifies as prima facie grounds. […]
24I appreciate that in Grant Thornton there were two highly sophisticated parties. While Fryday is a lay person, the only required diligence on his part in order to appreciate that the settlement was inadequate to provide for his needs would be to keep rough track of income and expenses. The fact that a person had medical and rehabilitation needs which he could not afford would stand out in a person’s mind.
25If there was any significant shortfall between Fryday’s income and accident benefits for goods and services I infer and find that he would have been aware of it. Certainly, a reasonable person would have been aware of it. Neither Fryday nor a reasonable person would need a lawyer to tell him that his income was inadequate to meet his needs.
26In Lauesen v. Silverman, 2016 ONCA 327, the plaintiff alleged that the defendant lawyer advised her to enter an improvident settlement. Counsel for Fryday placed considerable reliance on this precedent. In Lauesen the plaintiff’s vehicle was struck violently from behind by another vehicle on November 16, 2002. The plaintiff sustained physical and psychological damages. At a mediation on November 14, 2005, on the advice of the defendant, the plaintiff agreed to accept $26,169 in full settlement of her tort claim.
27The defendant continued to represent the plaintiff until 2009, at which time the plaintiff retained a different lawyer to pursue an accident benefits claim. In June, 2011 that lawyer obtained an opinion from a psychiatrist that the plaintiff’s injuries met the “catastrophic” threshold under accident benefits legislation. The action was commenced on August 26, 2011.
28The Court of Appeal held that the plaintiff’s claim was not statute barred. Justice Feldman explained:
42The motion judge erred in her interpretation and application of s. 5(1) of the Limitations Act, 2002 to the circumstances of this case. The appellant did not have knowledge that she had a claim against her former lawyer, the respondent, until she learned about it from her current counsel, based on an expert medical-legal opinion he obtained. The motion judge misapprehended the significance of that expert opinion. It was the first indication to the appellant and her new lawyer that her injuries from the accident were very significant and warranted more compensation than she had received from the settlement.
43Furthermore, given that the appellant had no reason to believe there was anything to investigate with respect to a potential claim against the respondent, she exercised reasonable due diligence in the circumstances of this case.
29I can certainly understand the Lauesen analysis, and why the court concluded that a reasonable person with the plaintiff’s abilities and circumstances would not have realized that she had a claim against her former lawyer until six years after the improvident settlement. For 4 years after the allegedly improvident settlement the defendant continued to represent the plaintiff and so expressly or impliedly represented that there had been no negligence. Further, a psychiatric report was necessary to determine that the plaintiff met diagnostic criteria for catastrophic impairment. Obviously, she could not be expected to diagnose herself.
30Unlike in Lauesen, Fryday would have a plain and obvious indication every year that his settlement was adequate or inadequate based upon his income, expenses and any additional goods and services he required but could not afford. If there was a significant shortfall this would give Fryday reason to believe there was something to investigate with respect to a potential claim against Gilby.
31Rule 20.04(2.1) provides that on this motion for summary judgment I can draw reasonable inferences from the evidence.
32Fryday’s mother and stepfather communicated to Leone in July, 2017 that Fryday’s needs were not being met. Fryday was present when this was discussed in September, 2017. There is nothing in the evidence to suggest that his needs were being met for the first 15 years after the settlement and then ceased to be met after December 17, 2016, thereby making the December 17, 2018 claim within the limitation period. Put differently, it is highly improbable that Fryday’s need spiked unexpectedly after December 17, 2016 so that the cause of action was only discovered at that time. If there was any such evidence, it was within the knowledge of Fryday, and it could and should have been put before the court as part of Fryday putting his best foot forward on the summary judgment motion.
33I find that it was plain and obvious such that Fryday knew, and that a reasonable person in Fryday’s position ought to have known, the following:
a) the settlement was premised on providing him with a monthly payment for life in place of the ability to submit claims to his insurer for accident benefits;
b) the monthly income he had received since 1999;
c) the monthly expenses he had incurred to obtain goods and services which would otherwise have qualified as accident benefits;
d) the particulars and value of any such goods and services that he needed or wanted but had insufficient funds to purchase. In other words, the fact that the settlement was inadequate to his needs.
34Having concluded that Fryday knew, and that a reasonable person ought to have known, certain material facts the question is whether that knowledge is such that he discovered his claim prior to December 17, 2016.
35Mr. Murray submitted that until Fryday received advice from Leone he did not know that litigation was the appropriate means to remedy his loss. I do not agree.
36In Presidential MSH Corporation v. Marr, Foster & Co. LLP, 2017 ONCA 325, the court discussed the “appropriate means” element of discoverability. Justice Pardu reviewed the caselaw which found that litigation may not be an “appropriate means” if:
a) the defendant has had continuing involvement attempting to mitigate or avoid the damage caused by an alleged negligent act;
if alternative processes are being used to attempt to resolve a dispute.
37In the case of Fryday, Gilby had no ongoing involvement and there was no resort to alternative processes. Fryday, by his Litigation Guardian, had previously commenced litigation to assert his rights. I, therefore, find that Fryday knew, and that a reasonable person ought to have known, that litigation was an appropriate means to remedy his loss.
38Mr. Murray submitted that Fryday was unaware of the material fact that the cost of future care report had not been put before the court on the applications to approve the settlements. I do not, however, regard this as a material fact significant to Fryday being able to recognize that the settlement was inadequate to meet his needs and so draw a plausible inference of liability.
39Mr. Murray also points out that Fryday did not obtain any legal advice until he spoke with Leone in 2017. The law is clear, however, that a limitation period does not automatically extend until a professional opinion is obtained.
40In this regard there is some analogy to Soper v. Southcott, 1998 5359 (ON CA), [1998] O.J. No. 2799 (C.A.). The plaintiff had surgery and following that was re-admitted to hospital three times to address continuing issues with the knee that had been operated on. The Court of Appeal held that the limitation period began when the plaintiff’s lawyer obtained her hospital records and not at a later date when she had a medical opinion that her surgeon had been negligent.
41Further, as discussed in Grant Thornton:
48It follows that in a claim alleging negligence, a plaintiff does not need knowledge that the defendant owed it a duty of care or that the defendant’s act or omission breached the applicable standard of care. Finding otherwise could have the unintended consequence of indefinitely postponing the limitation period. After all, knowledge that the defendant breached the standard of care is often only discernable through the document discovery process or the exchange of expert reports, both of which typically occur after the plaintiff has commenced a claim. As the Court stated in K.L.B. v. British Columbia, 2003 SCC 51, [2003] 2 S.C.R. 403, at para. 55:
Since the purpose of the rule of reasonable discoverability is to ensure that plaintiffs have sufficient awareness of the facts to be able to bring an action, the relevant type of awareness cannot be one that it is possible to lack even after one has brought an action. [Emphasis added.]
Although the Court in K.L.B. was dealing with discoverability in a different context, the basic principle is relevant here. The standard cannot be so high as to make it possible for a plaintiff to acquire the requisite knowledge only through discovery or experts. And yet, that is precisely the standard endorsed by the Court of Appeal in the instant case. With respect, that standard sets the bar too high. By the same token, the standard is not as low as the standard needed to ward off an application to strike a claim. What is required is actual or constructive knowledge of the material facts from which a plausible inference can be made that the defendant acted negligently.
42I, therefore, find that Fryday was aware of, and that a reasonable person with the abilities and in the circumstances of Fryday would have been aware within five years of the 1999 settlement of facts from which, “a plausible inference of liability” could be drawn. Fryday did not, and a reasonable person would not, need a lawyer to tell them that a shortfall between income, and expenses and needs, would give rise to a plausible inference of liability,
43As such, Fryday’s claim is statute barred on both a Limitations Act s.5(1)(a) actual knowledge analysis and a s.5(1)(b) objective knowledge analysis. The motion for summary judgment is granted and the action dismissed.
44The Lerners Defendants shall file a Costs Outline and submissions, not to exceed 5 pages, within 20 days. Fryday shall file his responding submissions, which may include a Costs Outline, within 15 days of receipt of the submissions by the Lerners Defendants. Reply submissions within a further 5 days.
Sproat J.
December 10, 2021